Yinka Agbabiaje

[Yinka Agbabiaje @Akuziology]

@LotsofKory Congratulations

[Taiwo Oyedele @taiwoyedele]

HOW THE PERSONAL INCOME TAX CHANGES WILL AFFECT YOU

Q1 - What is the thinking behind the proposed changes to the current tax table of personal income brackets and rates?

A1 - The current tax table was introduced in 2011. Due to high inflation and lack of review, the structure has resulted in “fiscal drag" where many low income earners have been pushed to the top tax bracket over time. This means that an individual earning just N400k a month is paying the same top marginal income tax rate as a wealthy individual earning say N20m per month. Therefore, the tax table has become regressive rather than progressive as it was originally designed. Also, the current personal income tax regime does not encourage formalisation given that the effective top tax rate on companies is nearly double that of enterprises which also encourages arbitrage in some cases between the two income tax regimes.

Hence, the proposed changes seek to address these issues and simplify the system by incorporating current reliefs and allowances into the bands and rates to achieve an overall lower effective tax rate for the majority of workers.

Q2 - There is a general perception that workers will pay more tax under the bills. Is this true?

A2 - This perception is not correct. Individuals earning about N1.7m or less per month will pay lower PAYE tax under the bills while those earning the new minimum wage and slightly more will be fully exempted. These thresholds will result in over 90% of workers in the public and private sectors paying lower taxes while high income earners will pay slightly more in a progressive manner up to 25% for the ultra high networth individuals.

Q3 - But the proposed table only exempts N800k per annum which is just about N67k per month meaning that minimum wage earners of N70k per month will still pay tax.

A3 - No. Besides the N800k p.a. which is exempt from tax, there is a rent relief of up to N200k p.a. which together will exempt individuals earning up to N1m per annum (about N83k per month). This is particularly beneficial to low income earners. Also, the new tax bands and rates have been designed to avoid a situation where individuals earning slightly more than the exemption threshold are taxed to an extent that makes them worse off than a person whose income is within the exemption threshold. For example, a person earning N30k per month is exempt from tax while a person earning N30,001 per month will pay about N500 leaving the latter with a net of N29,500 which is N500 worse than the person earning N30,000. Under the tax bills, this problem has been addressed as everyone will be eligible to the first tax-free bracket.  

Q4 - The tax rate for the second band seems quite steep, moving from 0% to 15%. Why not consider a lower rate for the second band?

A4 - By comparison, the second band under the bills which is to be taxed at 15% is currently being taxed at a marginal rate of 21% even after all reliefs and allowances. So, while the 15% may appear steep from 0% for the first band, it is lower compared to the current tax table. The real impact for a person earning about N3m p.a. equivalent to the aggregate of the first and second brackets is a lower effective tax rate of 10% compared to about 12% under the current tax table.

Q5 - Why was the Consolidated Relief Allowance (CRA) and Personal Relief removed? Does it not amount to giving a relief with one hand and taking it back with the other?

A5 - No. One of the objectives of the tax reforms is simplification. The impact of the CRA and personal relief have been incorporated into the tax table such that the overall goal of exempting low income earners and reducing taxes for middle income earners is achieved. By integrating the reliefs into the tax brackets and rates, many taxpayers with basic education would be able to calculate their taxes with little or no assistance thereby achieving the dual objectives of lower tax burden and tax simplification.

Q6 - How about statutory deductions such as Pension and National Housing Fund contributions?

A6 - Statutory deductions, now referred to as eligible deductions, are still applicable under the new tax bills. These are contributions under the National Housing Fund, National Health Insurance Scheme, Pension Reform Act, interest on loans for developing an owner-occupied residential house, annuity or premium paid for life insurance, and rent relief up to N200,000 per annum.

Q7 - Where can we get more information about the tax reform bills?

A7 - Please visit our website https://t.co/WYwlFEAtIE and social media accounts for more information including copies of the tax bills.

[Atal @ZabihullahAtal]

Harvard University is offering free online winter session courses

No Payment is required, just register and start learning!

12 courses you shouldn't miss:

[Yinka Agbabiaje @Akuziology]

@KaikkonenLab @EloiSchmauch @sikandhayat @UEF_DPMM @suvilinnak @manoliskellis Congratulations to the CADGEN research group.

[Tunde Ajayi @thetundeajayi]

I invite you to the inaugural Lagos State Sustainability Summit on the 12th of September at the Eko Hotel and Suites, Victoria Island, Lagos.

This significant event, hosted by the Lagos State Office of Sustainable Development Goals (OSDGs) in collaboration with LASEPA and the Lagos State Safety Commission, will ignite essential discussions to propel sustainable progress and shape the future of our state.

For registration and further details, visit https://t.co/itvdBuGHQd. I look forward to seeing you there!

#LASEPA #LSS2024#SustainableDevelopmentGoals

[Tunde Ajayi @thetundeajayi]

Considering your immediate environment, what is the biggest impediment to achieving a pollution-free environment and how can we help?

[Yinka Agbabiaje @Akuziology]

@thetundeajayi As they don't what to have sense naa...

[Yinka Agbabiaje @Akuziology]

You can say that anytime anyday...

[Tábuko-Photographer Swaag! @swaagsphotos]

@thetundeajayi Action man.

[Yinka Agbabiaje @Akuziology]

@KaikkonenLab Wow.... Excellence always. Congratulations.

[A. Richard Adéwọlé, Ph.D. @arksworld]

Hearty Congratulations Dear Prof. Joy Okpuzor! Thank you for your meritorious service to the Department of Cell Biology and Genetics, the Faculty of Science, and the University of Lagos.
@TawakaltF

[Tunde Ajayi @thetundeajayi]

It is actually the Law; @LasepaOfficial is empowered to enforce it!
The Lagos State Environmental Management and Protection law 2017.

[Kaikkonen Lab @KaikkonenLab]

Our paper on the SMC-specific TRAP-Seq mouse model is finally out! This was one of the 1st projects in my lab 10 years ago before scRNA-Seq was on the scene. Great for obtaining cell type specific data more affordably. Here applied in #atherosclerosis https://t.co/1Sq1DOxcmH

[Lagospidia @lagospidia]

Residents of Lagos State are urged to remain security conscious and report any suspicious happening around them by calling Lagos State Police Command Control Room on 08065154338, 08063299264 or 09129229576.

[Yinka Agbabiaje @Akuziology]

@KaikkonenLab @AIV_Institute A true leader.... Congratulations Minna

[Yinka Agbabiaje @Akuziology]

@Drblessingg @theovamediaBA I am sorry, you are not from Ekiti state, if you not you won't say out the bunkum in your head.

[Yinka Agbabiaje @Akuziology]

@Zikoko_Mag @peluminubi_ Nice to see you again @peluminubi_ Do you remember me?

[Yinka Agbabiaje @Akuziology]

Say what?

[Tunde Ajayi @thetundeajayi]

LASEPA ẹ dìde!

[Lagos State Environment Update @enviupdatelasg]

The phrase "No Gree For Anybody" essentially encourages people to reject any form of nonsense or resist oppression by others. It's an act to reject any form of environmental abuse. 'We No Go Gree For Anybody Wey Won Spoil Lagos'.

#CleanerLagos

[Tunde Ajayi @thetundeajayi]

Monitoring the pulse of Lagos through the Air quality index. Each reading tells a story of our city's air health.
This reading, albeit unsatisfactory, but we are committed to ensuring cleaner air and better living for the citizenry.
#EkoCleanAir